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TMI Blog2020 (11) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... s and we presume that the then assessing officer in the original assessment passed under section 143 (3) must have verified and formed an opinion on application of amended proviso to section 2(15) - reopening of the assessment was made with the wrong understanding of the facts by assessing officer and reviewing the concluded assessment is bad in law. Reassessment proceedings and reassessment order passed by the assessing officer in the assessee s case is quashed. Accordingly, the grounds arise by the assessee on the reopening of the assessment is accordingly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has not received any service charges from the farmers but received grants from the respective state governments. After considering the submissions of the assessee, assessing officer has completed the reassessment analysing the amended proviso to section 2 (15) of the Act, by observing that the then assessing officer has not found any opinion on this aspect and there is no discussion in the assessment order passed under section 143(3) of the Act. He also rejected the detailed submissions made by the assessee on reopening of the assessment which was reopened after the expiry of 4 years and there is no mistake on the part of the assessee to disclose fully and truly. 5. Aggrieved with the above order, assessee preferred an appeal before Ld CIT(A) and even before Ld CIT(A) assessee has made an elaborate submission on objecting to reopening of the assessment which is made after expiry of 4 years, also there is no mistake on the part of the assessee to disclose all the information fully and truly, the action of the AO is a case of change of opinion and with the submission that the receipts of the assessee are not from commercial activities. After considering the submission of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.03.2016, which was issued beyond 4 years of passing of original assessment order. He brought to our notice reason for reopening of the assessment which is placed at page no. 102 of paper book in which the assessing officer discusses that the information were taken from the same documents which were submitted in the original assessment and assessing officer's main reason for forming an opinion to reopening the assessment are procuring and sale of milk. However, he brought to our notice the financial records which was submitted in original assessment that the assessee never indulged in any commercial activities for procurement and sale of milk, the entire receipts of grants is from the respective state governments for implementation of the program called "Gopal". He submitted that the receipts from the state governments are not income but grants. 9. Further, he submitted that the assessing officer discusses the amended proviso to section 2(15) of the Act in the assessment order and reviews the operations based on the reasons given in the reopening of the assessment which was nothing but change of opinion by the assessing officer. He submitted that the reopening of assessment will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 77 taxman 327 (Gujarat HC). 12. On the other hand, Ld. DR submitted that assessee's contention was that there is no new material available on record but he submitted that assessing officer has discussed in detail in his order and relied on the case of Giri Lal and company (refer page 11 of CIT(A) order and 75 taxman 11 refer para 8.3.2 of CIT (A) order). He further submitted that there is no change of opinion in the present case, as in the original assessment order the then assessing officer has never formed any opinion on the issue of section 2(15) of the Act. Therefore, there is no change of opinion with respect to completion of this assessment. Further, he supported the findings of the assessing officer and learned CIT (A) in their respective order and he distinguished the case laws relied by learned AR. 13. With regard to Department appeal, both the learned AR and learned DR agreed that the issue under consideration is covered by the decision of the coordinate bench in assessee's own case and also the facts are similar to the case of Sabarmati Ashram which is passed by the Hon'ble Gujarat High Court. 14. Considered the rival submissions and material placed on record, we no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reopening of assessment to reassess income of the assessee from the activities of sale of milk and other activities. Since the assessing officer could not categorize the incomes from sale of milk and other activities, he has analyzed only the other activities which is nothing, but the project called 'Gopal'. The assessee is carrying on the activities of improving the cow breeds by way of upgrading the indigenous low milk yielding cattle to high yielding cattle is by following technique of artificial insemination. This is the only activities carried on by the assessee which is in line with the object of the trust. Therefore, the assessing officer has revised the exemption allowed to the assessee in the original assessment order. 15. We noticed that the assessing officer in the original assessment has not discussed the exemption granted to the assessee under section 11 r.w.s. 2(15) of the Act. There is no discussion even on the amended proviso to section 2(15) in the assessment order even though it is applicable from this assessment year. It is not necessary that assessing officer should bring on the discussion everything in the assessment order, it is presumed that assessing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied on the Hon'ble Gujrat High Court decision in the case of Sabarmati Ashram (supra). Since the decision in the Sabarmati Ashram is similar to the facts in the present case, we are inclined to accept the findings of the Ld CIT(A) and for the brevity, the ratio is reproduced below:- 9. Many activities of genuine charitable purposes which are not in the nature of trade, commerce or business may still generate marketable products. After setting off of the cost, for production of such marketable products from the sale consideration, the activity may leave a surplus. The law does not expect the Trust to dispose of its produce at any consideration less than the market value. If there is any surplus generated at the end of the year, that by itself would not be the sole consideration for judging whether any activity is trade, commerce or business - particularly if generating 'surplus' is wholly incidental to the principal activities of the trust; which is otherwise for general public utility, and therefore, of charitable nature. The Tribunal took into account the objects of the Trust, which are as under:- "1. To breed the cattle and endeavour to improve the quality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieving or helping the trust objects as deemed fit by the trustees". 10. The Tribunal also noted that the objects were admittedly charitable in nature. The surplus generated was wholly secondary. It was, therefore, that the Tribunal held that the proviso to section 2 (15) of the Act would not apply. 11. We are wholly in agreement with the view of the Tribunal. The objects of the Trust clearly establish that the same was for general public utility and where for charitable purposes. The main objectives of the trust are - to breed the cattle and endeavour to improve the quality of the cows and oxen in view of the need of good oxen as India is prominent agricultural country; to produce and sale the cow milk; to hold and cultivate agricultural lands; to keep grazing lands for cattle keeping and breeding; to rehabilitate and assist Rabaris and Bharwads; to make necessary arrangements for getting informatics and scientific knowledge and to do scientific research with regard to keeping and breeding of the cattle, agriculture, use of milk and its various preparations, etc.; to establish other allied institutions like leather work and to recognize and help them in order to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be evidence and material to show that the activity has continued on sound and recognized business principles, and pursued with reasonable continuity. There should be facts and other circumstances which justify and show that the activity undertaken is in fact in the nature of business. The test as prescribed in State of Gujarat v. Raipur Manufacturing Co. [1967] 19 STC 1 (SC) and CST v. Sai Publication Fund [2002] 258 ITR 70 (SC): [2002] 126 STC 288 (SC) can be applied. The six indicia stipulated in Lord Fisher [1981] STC 238 are also relevant. Each case, therefore, has to be examined on its own facts. In view of the aforesaid enunciation, the real issue and question is that whether the petitioner-Institute pursues the activity of business, trade or commerce. To our mind, the respondent while dealing with the said question has not applied their mind to the legal principles enunciated above and have taken a rather narrow and myopic view by holding that the petitioner-Institute is holding coaching classes and that this amounts to business." 14. In the result, we do not find that the Tribunal has committed any error and the Tax Appeal is therefore dismissed. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as inserted as a result of directions of Hon'ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that "We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment". In the ruled so framed, as a result of these directions, the expression "ordinarily" has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether the passing of this order, beyond nine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered appropriate, following the due procedure…". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary"period. 10.In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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